Europe: Russia sees May car sales plummet 38 percent image

New vehicle sales in Russia dropped 38 percent last month from the same period last year, the fifth straight month of decline for the year, but industry watchers believe there’s reason to hope now.

That’s because the plunge was a bit smaller than the 42 percent drop registered in April as the government measures to support the industry are finally starting to provide some relief and the local currency started to gain a little and might relieve more pressure over the coming months. Deliveries of new cars and light commercial vehicles slumped to 125,801 vehicles in May from 201,487 units the same month last year, according to a statement from the Moscow-based Association of European Businesses. “This relative improvement is unlikely to bring about a fundamental turnaround for the market,” commented Joerg Schreiber, chairman of the business group’s automobile manufacturers committee. Still, it “should help to slow down the pace of year-on-year sales decline in the coming weeks and months,” he added. The official also said the annual prediction would be updated next month – the earlier estimates said the Russian auto market, once poised to overcome Germany as the continent’s largest, would drop 24 percent in 2015 after sliding 10 percent last year.

So far, after the first five months of the year, new car deliveries have plummeted 38 percent to a total of 641,933 autos. The drop has come as Russian consumer demand was impacted by the very weak local currency and as inflation jumped to a more than decade high this March. The government tried to rekindle sales last year through a used-car subsidy program and now is offering subsidized auto loans and consumer leasing from the second quarter.

Via Automotive News Europe